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In Europe during the Middle Ages, ransom became an important custom of chivalric warfare. An important knight, especially nobility or royalty, was worth a significant sum of money if captured, but nothing if he was killed. For this reason, the practice of ransom contributed to the development of heraldry, which allowed knights to advertise their identities, and by implication their ransom value, and made them less likely to be killed out of hand. Examples include Richard the Lion Heart and Bertrand du Guesclin.

The abduction of Charley Ross on July 1, 1874 is considered to be the first American kidnapping for ransom.

In 1532, Francisco Pizarro was paid a ransom amounting to a roomful of gold by the Inca Empire before having their leader Atahualpa, his victim, executed in a ridiculous trial. The ransom payment received by Pizarro is recognized as the largest ever paid to a single individual, probably over $2 billion in today's economic markets.[citation needed]

East Germany, which built the Inner German border to stop emigration, practiced ransom with people. East German citizens could emigrate through the semi-secret route of being ransomed by the West German government in a process termed Freikauf (literally the buying of freedom).[4] Between 1964 and 1989, 33,755 political prisoners were ransomed. West Germany paid over 3.4 billion DM—nearly $2.3 billion at 1990 prices—in goods and hard currency.[5] Those ransomed were valued on a sliding scale, ranging from around 1,875 DM for a worker to around 11,250 DM for a doctor. For a while, payments were made in kind using goods that were in short supply in East Germany, such as oranges, bananas, coffee and medical drugs. The average prisoner was worth around 4,000 DM worth of goods.[6]

There were numerous instances in which towns paid to avoid being plundered, an example being Salzburg which, under Paris Lodron paid a ransom to Bavaria to prevent its being sacked during the Thirty Year's War. As late as the Peninsular War (1808-14), it was the belief of the English soldiers that a town taken by storm was liable to sack for three days, and they acted on their conviction at Ciudad Rodrigo, Badajoz and San Sebastian.

In the early 18th century the custom was that the captain of a captured vessel gave a bond or “ransom bill,” leaving one of his crew as a hostage or “ransomer” in the hands of the captor. Frequent mention is made of the taking of French privateers which had in them ten or a dozen ransomers. The owner could be sued on his bond. At the beginning of the Seven Years' War ransoming was forbidden by act of parliament. But it was afterwards at least partially recognized by Great Britain, and was generally allowed by other nations.

In the Russo-Japanese War — no mention was made of ransom, and with the disappearance of privateering, which was conducted wholly for gain, it has ceased to have any place in war at sea, but the contributions levied by invading armies might still be accurately described by the name.

Although ransom is usually demanded only after the kidnapping of a person, it is not unheard of for thieves to demand ransom for the return of an inanimate object or body part. In 1987, thieves broke into the tomb of Argentinian president Juan Perón and then severed and stole his hands; they later demanded $8 million US for their return. The ransom was not paid.[7]

The practice of towing vehicles and charging towing fees for the vehicles' release is often euphemized or referred to as ransoming, especially by opponents of towing. (In Scotland, booting vehicles on private property is outlawed as extortion.)

Warring international military groups have demanded ransom for any personnel they can capture from their opposition or their opposition's supporters. Ransom paid to these groups only encourages more hostage taking. Payments, not paid to the hostage takers, but rather paid to their military opponents can greatly discourage hostage taking.[8]

^Plutarch, "The Life of Julius Caesar" in The Parallel Lives, Loeb Classical Library edition, 1919, Vol. VII, p. 445. The pirates originally demanded 20 talents, but Caesar felt he was worth more. After he was freed he came back, captured the pirates, took their money and eventually crucified all of them, a fate he had threatened the incredulous pirates with during his captivity.